The Luxe is a 39 unit high-end apartment community located less than a mile away from the new Apple campus, which will house about 12,000 employees. Prior owner defaulted on the loan after a massive renovation for a condo conversion. Multifamily Investment Partners acquired this REO from a bank with court receiver mismanaged the property for months. After taking over the property, Multifamily Investment Partners installed professional management team and rebranded the property with new signage package, fountain, lobby upgrades and new interior finishes,which increased the averaged in-placed rent by over $450 per unit.  After holding for just over three years, Multifamily Investment Partners sold The Luxe to a large local private owner with XIRR of 30.6% and equity multiple of 1.95x.

City
Santa Clara, California
Units
39
Renovation Budget
$352k ($9,025 / unit)
Debt Partner

Fannie Mae

Equity Partner

Wilson Investment Associates, Individual Private Investors

Additional Details

Additional Details

Highlights

  • Increased rents by over $450/unit over 36 month period.
  • Minutes from corporate HQ of Apple and Kaiser Hospital.
  • Property in heart of Silicon Valley with access to huge tech job base.
  • Off‐market purchase via unsolicited offer.
  • Property targeted as it was in receivership and one of the lowest luxury communities in Santa Clara.
  • Total profit of $3,900,000 or $100,000 per unit.

Summary

Year Built
1972
Acres
1.14
Avg Unit Size
904 sf
Amenities

Pool, Fitness Center, W&D Fully Remodeled Units

IRR (Leveraged) 30.6%

Acquisition

  • Price: $8,800,000
  • Price/Unit: $225,641
  • NOI: $434,043
  • Cap Rate: 4.93%
  • Purchase Date: Jun. 2011
  • Avg. Rents at Close: $1,581 ‐ $1.75/ft

IRR (Unleveraged) 11.2%

Value‐Add

  • Capital Expense: $654,093
  • Cap Ex / Unit: $16,772
  • Total Cost: $9,454,093
  • Total Cost / Unit: $242,413

Equity Multiple 1.95

Exit

  • Exit Value: $13,400,000
  • Value / Unit: $343,590
  • 2013 NOI: $518,000
  • Cap Rate: 3.87%
  • Current Avg. Rents: $2,024 ‐ $2.40/ft
  • Sale Date: Jul. 2014